News Column

Vikings stadium bond sale delay may have led to better rate

January 28, 2014

By Doug Belden, Pioneer Press, St. Paul, Minn.

Jan. 28 --Minnesota Management and Budget completed the bond sale for the new Vikings stadium Tuesday at a lower interest rate than it likely would have gotten two weeks ago, the head of the agency said. But the state incurred legal and administrative costs because of the delay as well, said Commissioner Jim Schowalter . He said he couldn't specify the savings in interest payments or the additional costs from the delay. The sale was pushed back two weeks while a legal challenge was resolved. The state sold $462 million of bonds at an interest rate of 4.27 percent to support the state and city of Minneapolis' $498 million contribution to the stadium project. The Vikings are putting in $477 million . Annual debt service will be around $30 million , Schowalter said, and total costs over the 30-year life of the bonds will be about $881 million . The funds will be available Friday for use on the stadium, Schowalter said. Bloomberg reported this week that the state was likely to pay roughly an additional $15 million over the life of the bonds because they are backed by appropriations rather than the state's full faith and credit. Schowalter said that's a reasonable estimate. He said that because there is a risk -- though extremely remote -- that the state could fail to appropriate money for bond payments, the market charges a bit more. The state's general obligation bonds are rated one step higher than appropriation bonds, Schowalter said. Schowalter said he's confident the revenue sources the state has lined up to pay the bonds are sufficient, and at this point, "we're going to get on to stadium construction." The bonds are being sold to help fund the public's portion of the $975 million stadium, which will be built on the site of the Metrodome in downtown Minneapolis . While the Vikings are putting in $477 million , the city of Minneapolis will chip in $150 million and the state $348 million . The team hopes to move into the new 65,000-seat stadium for the 2016 season. Doug Belden can be reached at 651-228-5136. Follow him at and . ___ (c)2014 the Pioneer Press (St. Paul, Minn.) Visit the Pioneer Press (St. Paul, Minn.) at Distributed by MCT Information Services

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Source: Saint Paul Pioneer Press (MN)

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